Extract

The 2007-08 food crisis revealed a number of flaws in the global food system, including our ability to monitor the welfare impacts of rising food prices, or other economic shocks for that matter. Early on in the crisis, economists resorted to simulation models to predict the impacts of higher food prices on poverty, following Deaton's (1989) net benefit ratio approach. These partial simulation analyses predicted very negative impacts of higher food prices on poverty (e.g. Dessus et al., 2008; Ivanic and Martin, 2008; de Hoyos and Medvedev, 2009), though subsequent surveys showed that - at the global level, at least - poverty and subjective food insecurity both fell (Headey, 2013). Whilst the discrepancy between simulation models and historical data can be reconciled - particularly by the surprisingly strong economic growth in the developing world - the fundamental inability of existing monitoring systems to gauge short-run changes in food insecurity is clearly of some concern. In addition to the persistence of high and volatile food prices, a weak global economy leaves many developing countries vulnerable to recession, and large scale natural disasters may well becoming increasingly common with the onset of climate change (IPCC, 2012). In short, developing countries are highly exposed to shocks, but our ability to gauge the welfare impacts of these shocks is quite limited (Headey and Ecker, 2013). This chapter will therefore review a relevant sparse literature on the theory and measurement of food security in the context of major economic shocks.